Cyprus-Forum.com

[Sotos]

OK, maybe I am prepared to hold my nose and look the other way as long as I get an uninterrupted power supply and it doesn't cost the earth. The alternative is for global capital to get its hands on the national electricity grid and run it as a monopoly. I do not view that prospect with glee and would rather have the devil I know.

Now we're getting somewhere. Do you agree however that a private equity fund that would've taken a macro look at the economy and done some simple maths leading it to the obvious conclusion that energy output is GDP related. And if GDP increases then so will the output and effectively the profits of the power company. If we agree here then here's what we learnt in business school, you don't kill your client base. You encourage the growth of the economy by providing competitive energy regardless of whether you're in competition with someone or alone. Because the truth is you are never alone, you're client base is made up of a port that needs to compete with another port that uses a different power company, your client base is an airport that needs to compete as a hub with another airport in the region thats also supplied by a different company. If your clients don't do well then your investment won't either.

Now chances are that whoever takes over in the privatisations the money will come from pension funds or private equity funds. Typically they have an investment horizon of 7 years, which means in 7 years this firm better be in a better position than how they found it in order to realise their investment back with an acceptable return.

Now in all these points where a private investor can show that their interests are aligned with their consumers, can you give me ONE instance where a political party has its interests aligned with the people of Cyprus? (you do know that the parties run the power, phone and port companies. Right?)

A private investor cares about one thing and one thing only: How to get the highest return on his investment. And when you have a monopoly that is done by charging the highest prices possible. If there is direct competition then lowering prices could make sense because you could get more clients and therefore increase your profits. That doesn't happen with a monopoly. Our GDP will not grow and our economy will not be fixed just by lowering electricity prices. A ton of other things will need to be done for that to happen. So your argument that "lower electricity prices" = "higher GDP" = "more profits" doesn't stand and I doubt any investor will risk his money based on such kind of equations and none of them will come to Cyprus thinking that they will save our economy. What they will be thinking will be things like "How much profits is EAC making now?" "How much more profits can we make by cutting costs?" "Whats the worst case scenario for the economy of Cyprus. Can we still be making profits in such scenario?" etc etc

[Paphitis]

OK, maybe I am prepared to hold my nose and look the other way as long as I get an uninterrupted power supply and it doesn't cost the earth. The alternative is for global capital to get its hands on the national electricity grid and run it as a monopoly. I do not view that prospect with glee and would rather have the devil I know.

Now we're getting somewhere. Do you agree however that a private equity fund that would've taken a macro look at the economy and done some simple maths leading it to the obvious conclusion that energy output is GDP related. And if GDP increases then so will the output and effectively the profits of the power company. If we agree here then here's what we learnt in business school, you don't kill your client base. You encourage the growth of the economy by providing competitive energy regardless of whether you're in competition with someone or alone. Because the truth is you are never alone, you're client base is made up of a port that needs to compete with another port that uses a different power company, your client base is an airport that needs to compete as a hub with another airport in the region thats also supplied by a different company. If your clients don't do well then your investment won't either.

Now chances are that whoever takes over in the privatisations the money will come from pension funds or private equity funds. Typically they have an investment horizon of 7 years, which means in 7 years this firm better be in a better position than how they found it in order to realise their investment back with an acceptable return.

Now in all these points where a private investor can show that their interests are aligned with their consumers, can you give me ONE instance where a political party has its interests aligned with the people of Cyprus? (you do know that the parties run the power, phone and port companies. Right?)

A private investor cares about one thing and one thing only: How to get the highest return on his investment. And when you have a monopoly that is done by charging the highest prices possible. If there is direct competition then lowering prices could make sense because you could get more clients and therefore increase your profits. That doesn't happen with a monopoly. Our GDP will not grow and our economy will not be fixed just by lowering electricity prices. A ton of other things will need to be done for that to happen. So your argument that "lower electricity prices" = "higher GDP" = "more profits" doesn't stand and I doubt any investor will risk his money based on such kind of equations and none of them will come to Cyprus thinking that they will save our economy. What they will be thinking will be things like "How much profits is EAC making now?" "How much more profits can we make by cutting costs?" "Whats the worst case scenario for the economy of Cyprus. Can we still be making profits in such scenario?" etc etc

The government sector is the same unless you think they are interested in supplying you with cheap power.

The Private Sector will however lower costs through updated equipment and efficiency drives. Competition will also be introduced to the market because it is only a matter of time before someone wants a slice of the action.

Anyway, privatization is inevitable now, and there is nothing much anyone can do about it.

[DT.]

OK, maybe I am prepared to hold my nose and look the other way as long as I get an uninterrupted power supply and it doesn't cost the earth. The alternative is for global capital to get its hands on the national electricity grid and run it as a monopoly. I do not view that prospect with glee and would rather have the devil I know.

Now we're getting somewhere. Do you agree however that a private equity fund that would've taken a macro look at the economy and done some simple maths leading it to the obvious conclusion that energy output is GDP related. And if GDP increases then so will the output and effectively the profits of the power company. If we agree here then here's what we learnt in business school, you don't kill your client base. You encourage the growth of the economy by providing competitive energy regardless of whether you're in competition with someone or alone. Because the truth is you are never alone, you're client base is made up of a port that needs to compete with another port that uses a different power company, your client base is an airport that needs to compete as a hub with another airport in the region thats also supplied by a different company. If your clients don't do well then your investment won't either.

Now chances are that whoever takes over in the privatisations the money will come from pension funds or private equity funds. Typically they have an investment horizon of 7 years, which means in 7 years this firm better be in a better position than how they found it in order to realise their investment back with an acceptable return.

Now in all these points where a private investor can show that their interests are aligned with their consumers, can you give me ONE instance where a political party has its interests aligned with the people of Cyprus? (you do know that the parties run the power, phone and port companies. Right?)

A private investor cares about one thing and one thing only: How to get the highest return on his investment. And when you have a monopoly that is done by charging the highest prices possible. If there is direct competition then lowering prices could make sense because you could get more clients and therefore increase your profits. That doesn't happen with a monopoly. Our GDP will not grow and our economy will not be fixed just by lowering electricity prices. A ton of other things will need to be done for that to happen. So your argument that "lower electricity prices" = "higher GDP" = "more profits" doesn't stand and I doubt any investor will risk his money based on such kind of equations and none of them will come to Cyprus thinking that they will save our economy. What they will be thinking will be things like "How much profits is EAC making now?" "How much more profits can we make by cutting costs?" "Whats the worst case scenario for the economy of Cyprus. Can we still be making profits in such scenario?" etc etc

Re Soto, you're an AEListas, exatly how much money was Sophocleous paying Pambos Christodoulou?

[GreekIslandGirl]

If the nationalized industries are making profit, yes, it will be like an extra taxation. But what's wrong with that if it is fed back into the country's wealth? If the government is not spending that extra money well, then change the government, don't change the system from nationalised to privatised. Because then, you will never be able to directly use that profit to improve the country but it will go instead to the shareholders - who might live in Hong Kong or New York or London.

We are being FORCED to carry out these privatizations precisely because it is the Bankers (Troika) who are governing us and they are the ones who will win!

Once the Gas starts to be produced, the cost of electricity generation will go down but this will never be passed on to the consumers if the electricity company is in private hands where only the shareholders have to be satisfied.

- I urge every single Cypriot to move over to Solar.

[Tim Drayton]

There are more strikes today as parliament re-votes on the privatisation bill, but according to the Cyprus Mail:

“Electricity authority workers will stop working between 11am and 2pm but no disruption to the supply of electricity is expected.”

http://cyprus-mail.com/2014/03/04/union ... tion-bill/

[Tim Drayton]

The privatisation bill has been approved this time round.

http://cyprus-mail.com/2014/03/04/parli ... ation-law/

Does that mean more industrial action by the telephone, electricity and port workers?

[Sotos]

Mexico's telecommunications watchdog on Friday slapped regulations on Carlos Slim's telephone company America Movil and two of his financial and industrial companies, as it seeks to rein in the multi-billionaire and boost competition.

Mexico is trying to open up its phone and TV industries following the passage last year of wide-ranging telecoms reform meant to claw back the vast market shares enjoyed by Mexico's media players.

America Movil (AMXL.MX) controls about 80 percent of Mexico's fixed-line business via its Telmex unit and some 70 percent of the mobile sector through its Telcel unit. Customers have long complained about high prices and shoddy service.

....

Slim struck gold when Mexico privatized its telecoms industry in the early 1990s, using money generated by his phone business to build a vast corporate empire spanning mining to retail that gave him one of the world's largest fortunes.

http://uk.reuters.com/article/2014/03/0 ... IP20140308

High prices and shoddy service? Maybe we should send DT to Mexico to teach Slim how to run a business

[Tim Drayton]

How does this work? I thought it was a Troika demand that the electricity company be privatised.

Energy minister Yiorgos Lakkotrypis said that state-owned power producer Electricity Authority of Cyprus (EAC) must remain 100 per cent in government hands.

“The possibility of privatising the organisation is completely ruled out and the government is called to take a decision on the best way to split EAC in an efficient and effective manner,” Lakkotrypis said after participating in a meeting between President Nicos Anastasiades and EAC unions that object to its privatisation.

...

http://cyprusbusinessmail.com/?p=18577